The US Congress must “step up” its crypto-regulatory efforts

Coinbase, the world’s second-largest cryptocurrency exchange by trading volume, will be willing to register its dormant broker-dealers with the US Securities and Exchange Commission (SEC) as long as lawmakers provide clear guidelines for the crypto industry, said Faryar Shirzad, chief policy officer. officer at centralized central.

“We need Congress to step up,” Shirzad said on CoinDesk TV’s “First Mover” on Friday. “We have two party leaders in the House, the Senate [and] all relevant committees … all of which have stepped up and said, ‘we want to bring crypto under regulation.’

In contrast, Securities and Exchange Commission Chairman Gary Gensler has said that the federal agency’s existing rules already provide clear rules for crypto platforms that issue tokens, and that the agency’s securities laws can be applied directly to the crypto markets.

But Shirzad pointed out that “every crypto token is not a security,” and that the debate over whether “every crypto is a security or not is a very American one.” According to him, the US approach to crypto regulation does not reflect what is happening in other countries and can therefore stifle innovation.

“There is no other country in the world that has as fragmented a regulatory system as we do,” he said, noting that the United States may be among the only countries in the world that use two different market regulators, one for commodities — the Commodity Futures Trading Commission ( CFTC) – and a securities regulator, the SEC.

“In every other country in the world … there is one market regulator,” Shirzad said. “They provide ground rules for what kind of investor protection [and] market integrity rules you need and the crypto ecosystem can operate under those rules,” he said, giving crypto companies the opportunity to “innovate, grow, develop, [and] provide products that customers want, while ensuring that customers have the protections and disclosures they need.”

As to whether the US-based centralized exchange would register with the SEC as a regulated exchange, Shirzad said it “would love to register” the two dormant broken dealers it owns, but that “the reality is there is no path to registration.”

“It’s not a matter of coming in and talking, filling out a form and signing up,” he said. “‘Has anyone done it? What do you want to register as? How do you overcome the fact that tokenized assets are not allowed to be traded either on a broker dealer or on a national exchange? What is the solution to allow crypto markets in general or tokenized debt or equity act in an SEC-authorized manner?'”

But at the moment, Shirzad said, “there is no clarity and no path on any of it.”

“It is very important for the US to remain part of the crypto ecosystem,” Shirzad said, adding that if the US were to fall behind in crypto innovation, “it would be disastrous for US national security interests.”

But crypto may face challenges as the SEC continues to trudge along on its regulatory enforcement.

Last week, the agency settled and fined crypto exchange Kraken, ordering it to shut down its staking-as-a-service platform to its US customers. Almost a week later, it said it planned to take enforcement action against stablecoin issuer Paxos for the alleged sale of an unregistered security token, Binance USD (BUSD). This week, the agency said it would sue stablecoin issuer Terraform Labs and its founder, Do Kwon, for misleading investors.

For now, Shirzad said “It’s only fair that all of us who are trying to build this really dynamic and transformative ecosystem should have some clear rules of the road,” he said.